Four ways to build a future through agent networks

By Mercus Chigoga, Head of Consumer Business Banking, NBS Bank Malawi
March 23, 2015

Background: With support from the Helix Institute of Digital Finance, Women’s World Banking organized and co-led a training on agency banking network development in Tanzania. Women’s World Banking is working with three institutions Diamond Bank (Nigeria), NMB (Tanzania) and NBS Bank (Malawi) to build agent banking networks and increase access to banking services, particularly for women. The four day training convened leaders from our three bank partners for technical lessons and peer exchange.

As someone with a non-banking background who joined NBS Bank last year, this training was a great opportunity to learn best practices in building agency banking networks.

NBS Bank, one of the top three banks in Malawi, has identified low-income populations as a key part of our growth strategy. Malawi is a primarily rural country and the agent network will bring NBS Bank closer to low-income customers for whom the bank branch is not easily accessible. We formally launched our agent network “Bank Pafupi” last year and have a rapidly growing number of agents who offer deposit and withdrawal services

I saw this training as an enormous opportunity to learn from agency banking experts and peers. Indeed the training met my expectations and in some respects even exceeded them! We identified four key areas to prioritize as we refine our strategy.

Explore new partners to increase our agent footprint – In building our agent network, NBS Bank has had trouble with recruitment as many potential agents do not have enough capital or suitable qualifications. NBS’s recruitment strategy is a hybrid model where we work with both corporate partners such as the Malawi Post network as well as directly with retail agents such as neighborhood shops. This training has taught us that we must widen our net in both areas and consider other partners such as village cooperatives and savings groups as well as petrol stations and telecommunications companies.

Build awareness of agency banking among clients – This training has inspired us to ask the question: “How many people know that agency banking is within their communities?” We plan on working with our marketing department to find solutions to create awareness and drive usage. Our goal is to have people look forward to visiting our outlets!

Implement structured and consistent agent monitoring – This training has shown us that NBS Bank has the necessary tools for agent monitoring, but we must improve our structure and discipline. Through this training we learned how to structure the monitoring function to create accountability within the organization, the frequency with which we should monitor agents and how to use it as an opportunity to build a relationship with them.

Assure that agent incentives don’t have unintended consequences – We must make sure that the compensation of our agents is only encouraging behaviors we want to promote. For example, compensating agents based on the number of transactions they conduct could incentivize fraudulent transactions.

One the great things is that Women’s World Banking is working with banks across the continent and provides us with opportunities to learn from them. If we were a bank operating on our own in Malawi we wouldn’t have access to this. We are looking forward to implementing these lessons at NBS Bank, continuing to build out our agency banking network and increasing access to banking services across the country.